No quotations, missing minutes among challenges faced by LCS auditors

 

uditors say they sought documents on the LCS project from the management of Boustead Heavy Industries Corp but were unable to get them.

PETALING JAYA: The lack of access to quotations and missing minutes of meetings were among the challenges auditors faced in producing a newly declassified report on the navy’s troubled littoral combat ships (LCS) project.

In the 104-page forensic audit report by Alliance IFA (M) Sdn Bhd, which was released yesterday after being declassified on orders of the Cabinet, the firm said it had requested several documents from the management of Boustead Heavy Industries Corp (BHIC) but was unable to get them.Because of this, it said, it was “not possible to draw a valid conclusion to meet the standard of any forensic report to be accepted by the court” as the forensic audit was only carried out on selected years and did not go through the entire period covered by the apparent irregularities.

Among the documents Alliance IFA was unable to obtain were a complete set of LCS steering committee’s minutes of meetings held from 2012 to 2014, including presentations made to the members for their discussion and deliberation.

It also could not get “all the quotations by the OEMs (original equipment manufacturers), which became the basis for issuing Letters of Award and variation orders (VOs) related to the LCS programme” and “details of all the payments made during 2012 to 2013” listed as “Technical Evaluation Services by Boustead Naval Shipyard (BNS) for Second Generation Patrol Vessel (SGPV)”.

Apart from BHIC’s general ledgers from 2010 to 2014, the auditors were also unable to get a complete set of minutes of the company’s audit committee meetings from 2010 to 2014 and a complete set of minutes of BHIC finance committee meetings from 2014 to 2015.

“Even after the submission of this report, it will not meet the true requirements of a forensic report because our engagement is restricted until financial year 2014 (FY14),” said the firm.

The report also found other evidence of irregularities and lack of proper governance in the LCS programme, key among them the vendors already being determined even before the government issued the Letters of Award to BNS.

BHIC is the controlling shareholder of BNS, which was contracted to build six frigates for the navy.

Parliament’s watchdog, the Public Accounts Committee previously said RM6 billion had been spent on the project since 2014 but none of the ships had been completed or delivered. - FMT